P2P is iTunes' biggest competitor?

According to iTunes Vice President Eddy Cue, Apple's biggest competitor in online music downloading is P2P. iTunes launched in Australia yesterday, giving Australian people what Cue says is an alternative to illegal music downloads with a fair price. Songs in the Australian iTunes store will cost $1.27 each ($12.86 per album) and music videos will cost about $2.57.

"Our view is that our biggest competitor is illegal music and P2P services. We always thought that if we offered a better alternative, then those customers would be happy to pay," said Cue. "Obviously...we will never be better than 'free.' But we think $1.27 (1.69 Australian dollars) is a very competitive and fair price to pay." Cue hyped up Apple's iTunes music store, repeating its worldwide success again.

"We have now sold over 600 million songs worldwide and have nearly 80 percent market share in most of the countries we are in," he said. "This is our 21st time, and I will say that there is no place that we have ever launched where music downloads have been strong prior to us." He also has a belief that the next generation of music buyers will see music as "digital bandwidth".

"It is certainly our belief that digital music buying is the future of music purchasing. Certainly our customers love it, and you can see it in the younger generation. They buy a lot of music now, and they buy it all online. That is what they know music as. They certainly do not know music as a record or as a CD--they know it as digital bandwidth," Cue said. However, should Apple really get the credit for the popularity of music downloading?

Yes, iTunes does have 80% of the market share in most countries it operates in, but would iTunes be any way successful if it wasn't for P2P in the past? If there was never the original Napster, or controversy over free music file sharing and iTunes had launched in 1999, how much different would the success of the store be? Would it have taken longer to convince people that downloading music is a good thing to do or even created anything near the "buzz" that "sharing music" created?

If you look back through the past few years, you notice that P2P is what brought about the joy of digital music on a worldwide scale and now that it has increased to phenomenal popularity, it would be easy for companies like Apple and RealNetworks to cash in off legal stores now that P2P has "proven" digital music downloading to be an easy, fast way to get music. Many file sharers download hundreds or thousands of songs for their collection, not like those who purchase CDs, who probably only get a few new CDs per month at most.

If you were a file sharer who had a collection of over 1000 tracks and one day, for some reason, all your downloaded music files were gone and you decided to switch to a legal alternative instead, you probably wouldn't buy the same number of tracks, but you would probably buy more than people who just discovered digital music downloading with iTunes and never used P2P networks to get their music. This is just because you are used to having a large number of songs and probably discovered a lot of new music when you downloaded it for free. You are much more comfortable with digital music.

However, the music industry cannot deny that Apple has pushed legal music downloading forward. Apple did make it easy to purchase music downloads and to add more fuel to the fire, cleverly tied the iPod and iTunes music store together. Apple also realizes that this still is just the early days of legal music downloading, so keeping a blanket price for tracks is the best option - a fact that certain major labels don't seem to understand.

38 user comments

All I have to say is that as long as there is no DRM involved this sound good its not free but resnable.

Quote:"Our view is that our biggest competitor is illegal music and P2P services. We always thought that if we offered a better alternative, then those customers would be happy to pay," said Cue. "Obviously...we will never be better than 'free.' But we think $1.27 (1.69 Australian dollars) is a very competitive and fair price to pay." Cue hyped up Apple's iTunes music store, repeating its worldwide success again.

Those prices are pretty good for good quality audio and not sometimes gettin crap quality and some that dont even work...

Quote: They certainly do not know music as a record or as a CD--they know it as digital bandwidth," Cue said. However should Apple really get the credit for the popularity of music downloading?

i dont know about anyone else, but my record player gets used quite frequently.
and as for apple getting credit for the popularity of music downloading, thats rediculous. people downloaded wayyyy before apple came into the picture.
the only thing apple should get credit for is ruining free file sharing.

Face it, filesharing songs lose so much quality, that a song worth buying, is typically bought or $1. Sounds not worth a dollar, are downloaded off filesharing at a loss of quality (Bass especially seems to disapear). If you don't make money off your album because of filesharing, get a new job.

Quote:It is certainly our belief that digital music buying is the future of music purchasing.

i may speak for myself here, but when i buy music, it's from the shops, where i can rip and encode it to whatever bitrate i wish.

Quote:Face it, filesharing songs lose so much quality, that a song worth buying, is typically bought or $1. Sounds not worth a dollar, are downloaded off filesharing at a loss of quality (Bass especially seems to disapear). If you don't make money off your album because of filesharing, get a new job

Reasons, if you use some intelligence when downloading (i mean that in a nice way, no offence intended :) then i can guarantee that 99%+ of your songs you download are of extremely high quality.
Most albums available on the bittorrent network ripped within the last year will be in VBR, which means that you will get the maximum quality of the song in the minimum bitrate.
And if you use limewire, for example, you can check the bitrates before you download. anything 192kbps+ is good news.
There is no way that the service apple offer beats p2p... their music is encoded @128kbps - the lowest bearable bitrate. that explains the fast downloads you get from them.
Also, they strap it up with the infamous DRM restrictions crap which we all love to hate.
Keep away from itunes. just my HO :)
J

This message has been edited since its posting. Latest edit was made on 26 Oct 2005 @ 9:53

you really have to wonder at all this hype.Fine the price might be fair now but i cant see those greedy bastards keeping it there.They always look at the bottom line and have to improve on it.This year its $1.27 but lets see what it is like in 12 months .

There's no sure fire way of identifying the quality of a file, however, since many encoding programs allow for a 'quick convert' which can make 320k sound like 64k. You still experience the odd bad file now and then, but I do agree, with common sense you will get what you're looking for.

Agreed. I can easily get songs at qualities matching if not higher than the quality of CD audio off of P2P networks. You just need to know where and how to look! And personally, I find that 128 kbps MP3 audio sounds just as good as anything higher than it so I often get as much quality as I need when I download.

Quote:said Cue. "Obviously...we will never be better than 'free.' But we think $1.27 (1.69 Australian dollars) is a very competitive and fair price to pay."

It would probably come as a surprise to Mr Cue that the majority of people who love music don't mind paying a reasonable price for a music download of reasonable quality. The AAC format, while better than mp3, is still lacking in quality due to the fact that parts of your music are left out of the encoded song for the sake of compression. I know that they tell us that we aren't able to hear the discarded data anyway, but that is total BS. While it's true, generally speaking, that a song encoded at a higher bitrate does sound better, a song with holes in it, at any bitrate, still sounds like a song with holes in it. Music retailers really do owe it to their consumers to encode their music in a lossless format such as FLAC, or Monkey's Audio. These formats remain true to the original data and still allow compression for smaller filesizes.
As long as the DRM dictatorship rules I will buy most of my music from Best Buy or amazon.com, but if someone out there were astute enough to offer music downloads in a lossless format (encryption notwithstanding), I would surely be more willing to purchase more of my music via the download method. Knowing what I spend on music on my modest income, I would think that there is plenty of revenue out there to be collected by the company that is smart enough to figure this out.

Too much of a good thing is a bad thing. If a company is swarmed with customers because of ultra-quality music their servers won't be able to support the massive bandwidth of uploading files 5x larger or so than the MP3s they are used to shelling out, especially to a majority market (if they became successful). It's costly, and therefore prices would increase to upload the songs. Also, the average customer likes the idea of storing massive amounts of music on their iPod or whatever, and larger file sizes mean fewer songs, larger/longer donwload/load times, and better and more expensive MP3 players to support the higher bitrates played (352 kbps is the record so far I beleive, and that's not enough for lossless...). Also, there's the entire factor that a market needs to revamp itself to deal with FLACs rather than MP3s/ACCs. MP3 players, DVD Players, P2P Software, PC Music Players, and so on. It's hard.

Quote:If a company is swarmed with customers because of ultra-quality music their servers won't be able to support the massive bandwidth of uploading files 5x larger or so than the MP3s they are used to shelling out, especially to a majority market (if they became
successful).

First of all, I don't expect that any company would try to make as sweeping of a change as to eliminate mp3 and totally replace it with any format, certainly not overnight. They most likely would set aside a limited amount of resources to offer the new format along with the format that they were predominately using at the time. This would probably be accommodated by adding a handful of new servers, at
least until they could get an idea of what the demand for this new format will be. Certainly not a huge problem for a company like Apple. Heck, they may even be able to get a good deal on them somewhere. Also, it is no great undertaking to encode in a lossless
format such as FLAC, as all you need is a codec. Actually FLAC would be a very attractive choice for a company to offer. FLAC is an acronym for Free Lossless Audio codec. I emphasize the "Free" because it is an open source format. There is no patent on this format and the source code is available for public use. I do believe that to use it in an application a company would have to register for certification by the FLAC project organization.
Since there would be no licensing fee to use FLAC it would be much cheaper to use than mp3, which does require a company to pony-up the pesos to Fraunhofer IIS.
All I am saying is that I believe that there is room out there in the music download universe for a lossless format. In just this past year the number of options, as well as the quality of those options, are
allowing a large number of folks to connect their PC to their home theater system. If you add in the fact that storage has shown a large decrease in price over the past few years I do believe that a market does exist for a good quality audio format.

Agreed. It may take time to implement, but paying over 80% of the price of the CD for the album as mp3, especially when the bitrate is les than a quarter of that of a CD (1200k) just doesn't seem right.

Oh yeah, good point. I never even thought of that. Well, thing is I heard it from an official and very accurate audio site that CDs were about 1500 kbps. And remember too, that some things (like HDDs too) multiply by 10, and not 8, when converting bps to Bps. I dunno... Any experts here to answer this? Any studio recorders?

Yes but bytes to bits is definitely x8. That I'm sure of...
The 8 as opposed to 10 i think stems from the uses of Kilobyte and Megabyte.
A Kilobyte in the traditional sense is 1000 bytes, but because of binary processing, they often use Kibibytes, which are 1024 bytes. Hence why something can be 410KB and 400KB at the same time. They're two different measurements.

Hey guys. I'm sure as heck not an expert on anything, but I just happen to have a CD-RW and a calculator here handy. The CD holds 700 meg and is 80 minutes long. When I do the math it looks like sammorris is right on target, as I come up with 149.333k per second. That's unless I screwed it up somewhere along the line.

The other factors I'm talking about are other files on a disc, but in most cases you would actually be right with your 80 minutes to 700 MB comparison. yup, i was wrong, everyone else was right. same old, same old. happy? :P

No prob. It happens to me all the time. It sort of looks like we have different priorities when it comes to music. Like a lot of folks, you are looking for the best bang for your buck when it comes to filesize, and are willing to compromise a little in other areas to achieve this. Myself, I am looking to get out of a compressed format 100% of the music quality that was present before the file compression algorithms kicked in. I don't want to compromise at all. In a world where we put a man on the moon, surely there must be seperate ways that can reasonably be made available to give both of us what we want. I have some suggestions for anyone in the recording industry that is willing to listen, but I don't see that happening anytime too soon. I guess they figure "Why listen to him? He's no rocket scientist." From what I can tell, neither are they.

This message has been edited since its posting. Latest edit was made on 02 Nov 2005 @ 15:44

Heheh. Yup, nie comp there, guy. Anyways...
"you are looking for the best bang for your buck when it comes to filesize, and are willing to compromise a little in other areas to achieve this."
You nailed it. That and the fact that I'm half deaf thanks to two childhood accidents, so I can't hear the difference between 128kpbs MP3 and anything higher. To me, it sounds like no quality has been compromised. :)

To me, most 128k files aren't distinguishable, but for some files, 192k is needed to really get a proper sound output. Really, lossless is kind of a waste of time and space if you think about it.
Oh, and Matt0401, My comment was aiming to tell you that a 200GB disk of mine failed (though not due to any fault of its own). I sort of look and listen to the unit regularly in case anything else fails after a catastrophic INTERNAL power surge. Ugh, never buying Qtec again...

You're just jealuus that we can store 10-30x more music on our hard drives because even after compressing them to bits (which kinda makes sense... lol) we don't think they sound crappy. Good ears are your curse! Haha. You're not deaf and we are. :P
Ironic. I'm making fun of someone for not being deaf.

Yeah. I use WMP ripping and it works quite nicely. I go for 192k most of the time instead of 128k because I like to share my music with others (besides, a little extra bitrate-room wouldn't hurt anyways) and stuff. I tend to be much more picky with video, than audio. I notice small video artifacts a lot more than others and anything less than DVD-quality video and I'll often not want to watch it. My family just got satellite, and even it isn't clear and sharp enough for my tastes. I can't wait for HDTV!

Yeah, a Sky+HD subscription with an HD LCD would go down nicely in my house.
Pfff, unlikely. See, unlike a large number of people on this website, we don't have endless disposable income to spend on Twin overclocked water cooled graphics cards, and plasma screens the size of small bungalows, so we have to make do with what we have, which at the moment is Sky and a 25" Standard 4:3 Black TV. It works, so what's the problem?